On March 24, 2023, a bill of law was submitted to the Luxembourg Parliament, proposing amendments to the Luxembourg fund laws, namely the Law of 2010 on UCIs (UCI Law), the Law of 2007 on SIFs (SIF Law), the Law of 2004 on SICARs (SICAR Law), the Law of 2013 on AIFMs (AIFM Law), and the Law of 2016 on RAIFs (RAIF Law).

Below is a summary of the main changes:

Definition of “Well-informed Investor”

The proposed amendments aim to harmonize the “well-informed investor” definition in the SIF, SICAR, and RAIF Laws by reducing the investment threshold to EUR 100,000 and aligning the list of entities that can certify the experience of other well-informed investors.

Time Limit for Reaching Minimum Capital

The proposed amendments suggest increasing the subscribed capital time limit for SICARs, SIFs, and RAIFs to 24 months, while for Part II funds, the time limit is proposed to be extended to 12 months.

Harmonization of Legal Form for Part II UCI

The proposed amendments aim to align the available legal forms for Part II SICAVs with the legal forms permitted under the SIF, SICAR, and RAIF Laws.

Simplification for RAIFs

The proposed amendments also seek to simplify the formation formalities for RAIFs where a RAIF is set up by virtue of articles of association, by eliminating the requirement for a Luxembourg notary to acknowledge the establishment and appointment of an external AIFM within five business days if established through notarial deed, although this requirement still applies to RAIFs established through private deed. Moreover, it clarifies that marketing RAIFs to well-informed investors in Luxembourg is permitted.

Amendments to the AIFM Law

The proposed amendments would allow authorized alternative investment fund managers to have recourse to tied agents as defined by the 1993 financial sector law.

In conclusion, the proposed amendments represent a significant step towards modernizing and improving Luxembourg’s fund toolbox by providing a more consistent and practical approach. It remains to be seen how the proposed amendments will be received by the Luxembourg Parliament and whether they will ultimately be adopted. The bill of law is subject to the lawmaking procedure and may undergo further changes. We will keep you updated on the evolution of the Luxembourg funds rules.

If you have any questions regarding the information above, our investment management team is here to help. Please do not hesitate to contact us for expert guidance.